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Sunday, August 31, 2008

Two articles from last Sunday's Business section which are worth reading:

First:

BUSINESS / YOUR MONEY | August 24, 2008Economic View: Finding the Mess Behind the Mess By TYLER COWEN The fundamental problem in the American economy is that, for years, people treated rising asset prices as a substitute for personal savings.

This one repeats a lot of themes you may already be tired of reading about, regarding the current economic/financial mess we find ourselves in. But it brings to the fore an underlying reason for this mess--the tagline above, about how Americans have used rising asset prices (stocks and then houses) as a substitute for savings. In fact, let me quote the first part of this article at length:

A BURSTING real estate bubble set off the Japanese recession of the 1990s, which deepened as ailing banks languished. It took Japan’s economy more than a decade to resume steady, noticeable growth.

Will this happen to the United States? Probably not, but we may face a protracted process of recovery, stretching longer than the two or so years usually required to climb out of recession.

Behind every financial crisis there is usually a crisis in the real economy, based in some underlying structural deficiency. Even if the financial crisis is bottoming out, sooner or later the real crisis must be faced.

The fundamental problem in the American economy is that, for years, people treated rising asset prices as a substitute for personal savings. The thinking went something like this: As long as your home’s value rose every year, you didn’t have to set aside so much from your paycheck. If your stocks went up, too, so much the better; don’t forget that the Dow Jones industrial average stood in the 800 range in 1982 and seemed to rise almost nonstop for many years.

Of course, asset prices haven’t been rising much lately, so many people will need more savings for their retirement or for possible emergencies.

The need to save more sharpens a number of interrelated secondary problems. First, America is aging. More people than ever are entering the years when they stop saving and start spending their nest eggs. That means the transition to higher-than-expected savings may be drawn out and painful.

The second problem is that the American economy is enduring a credit crisis, with many banks trying to raise more capital and make fewer loans. Savings are good for the economy when they lead to investment, but there is no guarantee that financial institutions will be allocating capital efficiently.

The third problem is that lower consumer spending will require the American economy to make some shifts. That may mean fewer Starbucks and fewer new homes but more tractor production for export to foreign markets. In the long run, shifting some consumption to investment is probably beneficial to the economy; in the short run it means job losses and costly readjustments.

In addition, there are still excess homes on the market, and housing prices need to fall further. Of course, such price declines can make banks less solvent and thus worsen the credit crisis. And politicians would like to moderate this fall in prices, again prolonging the adjustment process.

And also a paragraph near the end:

Emerging from the current slowdown isn’t just a matter of political will or smart central banking. If the recipe for success requires smooth adjustment into new growth sectors, more savings from disposable income, cleaning up the housing mess, well-functioning energy markets, and more effective financial intermediation — all in the right combinations and in the right sequences — neither the government nor the Federal Reserve can control this process. The Fed can add regulatory and monetary clarity, but there isn’t any magic bullet. Beware of anyone who tells you there is.

The Japanese failed to break out of their recession quickly because they didn’t promptly close down or clean up their problem banks. So far, the Fed and other regulators show no signs of making this mistake; they have been vigilant in resolving crises as they occur. But that’s not enough to guarantee a successful transition. The American economy will be tested for its deftness — and the test will be difficult precisely because there isn’t a single enemy on which to focus.

Note that the essay begins with allusions to Japan's experience in the 1990s: a long, protracted recession which followed a real estate bubble. That is a comparison that a lot of people are making these days. It's unlikely that the US will also go through a "lost decade" of economic stagnation..but it's not impossible.

In fact, the second article I wanted to point out indicates we've got a ways to go, by looking at Merced, CA as a sort of "canary in the coal mine" for the rest of the nation's housing market:

Saturday, August 30, 2008

The title pretty much describes the painting, by an artist named Zhang Hongtu. It was featured in this WSJ article from last week. Take a look. Also, here is the artist's website (which, the article notes, is blocked in China): MoMAO (Museum of My Art Only!). The article notes that the Hongtu lives and works, oddly enough, in Woodside (Queens).

I'd saved that page of the WSJ not only for that article, but also for a short piece Nat Hentoff wrote, titled "These Little Kids Thing Coltrane is Cool"--a nice piece to read it you're a listener of jazz and/or an educator.

Amazing that Hentoff is still writing, but somewhat odd it's for the pages of the WSJ. But the latter has some decent culture coverage..I've seen insightful articles over the past couple weeks about the passings of Isaac Hayes and Jerry Wexler, as well as a review of a new James Brown concert documentary. May post those eventually..

Friday, August 29, 2008

On vacation for an extended holiday weekend (vs the extended staycation I've been on most of the summer :). One of the many things I'd planned to catch up on is the blog--I brought w/ me a pile of NYT pages with articles I'd saved to post.

Here are a few articles that appeared over the past couple weeks regarding the conflict in Georgia; or should we say, more precisely, the conflict in South Ossetia, since it's unclear which nation, Georgia or Russia, has sovereignty over that disputed region. After the events of the last couple weeks, probably the latter..

If you're only going to read one article, you could do worse than the following long but comprehensive account of the roots of the current conflict; well, comprehensive in the sense of recent history, going back to approx Jan 2004 with the rise of Saakashvili to the Georgian presidency:

WASHINGTON | August 18, 2008 U.S. Watched as a Squabble Turned Into a Showdown By HELENE COOPER, C.J. CHIVERS and CLIFFORD J. LEVY The U.S. seemed to have missed — or gambled it could manage — the depth of Russia's anger and the resolve of Georgia's leader to provoke the Russians.

Here are the concluding paragraphs, beginning with a key quote from Jacques Rupnik, "an Eastern Europe expert at the Paris Institute of Political Studies, known as Sciences-Po":

“Russia has never been a nation state, but always an empire, with Muskovy gradually expanding its borders since the 15th century,” Mr. Rupnik said. “Russia built a state as it built its empire; the two were inseparable.”

The Russian Federation was never a state in its current borders, and more than 25 million Russians live outside it, mostly in the former Soviet Union. “These new borders are new and somewhat artificial,” Mr. Rupnik said. “And we in the West never fully measured the effect of this loss of empire on the Russians, or how integral Ukraine is to the Russian sense of self.”

The Orange Revolution in Ukraine, which Russia failed to stop, “was the real wake-up call for Putin,” Mr. Rupnik said. “The Russian conclusion then, and it’s widely shared there, is that the limit has been reached — no more concessions, a push for rollback, and definitely no Georgia and no Ukraine in NATO.”

Ukraine has its own built-in ethnic Russian enclaves in the east and in Crimea — the home of the Russian Black Sea Fleet and handed to Ukraine in 1954 by Nikita S. Khrushchev, the Ukrainian-born Soviet leader. Like Ossetia, split by Stalin so that North Ossetia is in Russia and South Ossetia is in Georgia, Crimea is a kind of poison pill to keep Ukraine in line, one supported by nearly total energy dependency on Russia.

That is why, for those like Mr. Asmus, NATO’s response to Russia’s actions in Georgia should involve Ukraine. But that is also why many Europeans do not want to commit to defending another Russian neighbor when they have neither the will nor the means to enforce that commitment.

Since the fall of the Berlin Wall in 1989, there have been numerous border changes in Europe — mostly recently in Kosovo, the example Mr. Putin uses to defend Russia’s move in Georgia. “We are still in the process of building and making states,” Mr. Rupnik said. “The map is not finished.”

This headline caught my eye, b/c the Hibernia bank building certainly caught my eye. I thought that perhaps I'd even taken a snapshot of it during one of the handful of times I walked that sketchy stretch of Market, in between the Powell St cable car turnaround and the Civic Center. The Hibernia is emblematic of that whole area--you wonder why this most central part of the city, of the entire Bay Area, is as sketched out as it is. But that's partly why you gotta love SF.

(It doesn't seem that I did take such a photo. At least it's not among my photos I tagged with "tenderloin.")

What really motivated me to post this link is what has to be the quote of the day:

David Jackson, executive director of the Bay Area Radio Museum, toured the building Tuesday with city officials, laying out his vision for a cultural arts center that would house music, sports and broadcasting museums, along with training facilities for dance, art and filmmaking.

Efforts to revitalize the distinctive building at the intersection of Jones and Market streets have stumbled in the past, though, often because of the owner's steep asking price for a property in an edgy neighborhood.

The Hibernia, with its soaring columns and domed entrance, has sat empty since 2000, when the San Francisco Police Department's Tenderloin Task Force left after nine years for a new $4.8 million station on Eddy Street, saying the Hibernia was ill-suited for police work and the rent too expensive.

That left the landmark to descend into a haven for public drinking, drug dealing and street urination four blocks from City Hall.

"That is an important part of the city," Jackson said, "and I saw a guy smoking crack out of another guy's shoe."

I can't claim the street cred of witnessing someone smoking crach out of another guy's shoe..but over the course of 3 years I certainly did see various drugs being dealt, smoked and injected--in the 'Loin, around 16th & Mission, on 6th St.

When it comes to that sort of "edginess", SF has NYC (or at least Manhattan) beat by a mile. From today's vantage point, it's hard to imagine the East Village/Lower East Side with that kind of squalor, as it apparently had, in the not-too-distant past..

Alright, I might go a little wild w/ this technique of posting newspaper articles: I've got a pile of such e-mails in a folder in my e-mail account that I'd planned to post sooner or later. The WSJ links may not work if you're not a subscriber..but at least you got the reference if you want to track it down.

Here's a fluffy one that I don't have to comment much on, about how financiers are getting into yoga. As Krops said when I forwarded him this link, traders (like most people) are trend-followers. But as he also said that yoga is legitimately a good thing, so he wasn't going to get too negative.

Interesting that Bill Gross practices ashtanga. That seems about right for a an intense guy. We went to one Ashtanga session at Mission Yoga, and it was intense, as were the practicioners.

One of my goals for the summer (of Sammy) was to develop my yoga practice, and initiate a meditation practice. Feel like I've been moderately successful in doing so..I haven't been to a studio as often as I thought (less than once a week--approx 6 or 7 times in 8 weeks), but I have been practicing almost daily at home.

I doubt this will show up on the blog formatted correctly..but maybe. If so, it will make it easier for me to post NYT articles--I'll merely e-mail myself the article from the NYT website (as I often do anyways, as a way of reminding myself of an article I want to revisit)..and then forward that e-mail to the e-mail address that automatically posts to the blog.

This is one that was in the today's Friday Arts section (which I'm realizing is very important to read on Friday itself, if you're an NYC resident and looking for something to do over the weekend; e.g., two weeks I ago I had to scramble to find a jazz piano concert. The jazz listings yielded 3 good options, out of which we chose wisely--Michael Wolff in the really nice downstairs auditorium of the Rubin Museum, for only $20 a head--rel cheap for jazz in the city).

The blurb explains it all--it doubles as a list of movies I want to see, sooner or later.

MOVIES | August 22, 2008 Film: Serious Pleasures: Season's Sweet Spots By STEPHEN HOLDEN A look at 10 of the best art films this summer, several of which portray an unjust world in which ordinary people are at the mercy of the rich and powerful.

Monday, August 04, 2008

I'll have to write up short account of the (free) shows we/I have gone to over the past 3 weeks: the Manhattans/O'Jays, Bahamadia, KRS-One, and Willie Colon. (See below for a video clip from the KRS-One show, shot by your truly--my first upload to YouTube!)

But right now I'm bummed we didn't get in to see Erykah Badu! She was the latest performer at Brooklyn's MLK concert series--the first of which was the Manhattans/O'Jays show I attended, 3 weeks ago.

For that show, I got there sometime around 8pm, and ended up sitting on the bleacher for at least an hour, listening to Marty Markowitz and assorted other personalities get on the mic, until finally the Manhattans came on ~9pm, and the O'Jays ~9:45pm.

So I was in no hurry for us to get down to Wingate Field this evening--we left home close to 8pm, and didn't emerge at Nostrand and Winthrop til 8:30ish...only to find that NYPD had set up a barricade on New York Ave, and were turning people away! Too packed on the field apparently... :(

So we got back on the train, got off at Eastern Parkway/Brooklyn Museum, got some ice cream on Underhill instead, and ended up walking all the way home, up Vanderbilt and down Fulton.

Can't believe we missed the opportunity to see Erykah for free! After having no problems w/ space for the Manhattans/O'Jays, I was very dense and somehow implicitly figured it wouldn't be that much larger a crowd for Erykah..even though I'd read some accounts of people lining up hours ahead of time last summer, for Lauryn Hill. (I am trying to let go of having regrets..but I'm having a hard time letting go of the regret of missing that show! Accounts of it made it all the way to RS!)

So you can guess where I'll be next Monday, late afternoon/early evening..getting in line early enough to make it in for Jill Scott!

PS: Here's that KRS-One clip I shot, Thursday Aug 24 @ the East River Park bandshell: